TaxTMI 
TaxTMI 
1995 (7) TMI 136
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....ent year 1985-86, and (b) unabsorbed depreciation relating to the assessment years 1976-77, 1977-78, 1981-82, 1982-83, 1985-86 and 1986-87 aggregating Rs. 2,29,818. In other words, against the income of Rs. 5,98,239 referred to supra the Assessing Officer set off an aggregate sum of Rs. 4,03,276. In the process he determined the assessee's taxable income at Rs. 1,94,963. In the process again the Assessing Officer did not accept the contention of the assessee that the business loss brought forward from the assessment year 1985-86 should be taken at Rs. 3,47,262. 3. The said issue was one of the subject-matters of the appeal filed by the assessee before the CIT (A). The assessee's contention before that authority essentially was that the Assessing Officer was not justified in computing the set off of the previous years' business loss in the manner he had done. The said argument did not find favour with the CIT (A) who declined to interfere in the matter. According to him, the method adopted by the Assessing Officer was in consonance with the provisions of section 115J(2) of the Act. 4. Shri T.N. Seetharaman, the learned counsel for the assessee, contended that by restricting th....
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....bsp; 3,01,824 1985-86 1,11,346 -------- 4,13,170 &n....
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....nbsp; -------- -------- Nil -------- Carried forward business loss of assessment year 1985-86 (excluding 4,58,608 unabs....
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....y way, affect the benefit of set off of earlier years' losses which is very much available to the assessee under the other provisions of the Act. This was made clear by the specific provisions of section 115J(2) of the Act. In particular, he contended that when section 115J(2) of the Act states that "nothing contained in sub-section (1) shall affect the determination of . . .", it means that nothing contained in sub-section (1) shall adversely affect the determination of..." Secondly, properly viewed, the provisions of section 115J(2) are analogous to those of section 80VVA(4) as it stood prior to the omission of section 80VVA by the Finance Act, 1987, w.e.f. 1-4-1988. 8. In view of the foregoing, therefore, contended Shri Seetharaman, the assessee is entitled to succeed on this issue. 9. On his part, Shri T.V. Unnikrishnan, the learned Departmental Representative, strongly supported the impugned orders of the lower authorities. He contended that if the assessee's claim is accepted, the provisions of section 115J(1) will be nullified. According to him, the provisions of section 80VVA(4) are not relevant. He, therefore, urged that the assessee's appeal on this issue should be ....
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.... behind these provisions is that other benefits such as carry forward and set off of business losses, carry forward of unabsorbed investment allowance, carry forward of deficiency under section 80J(3) and the like that are normally available to the assessee should not be interfered with. 14. Now, section 115J starts with a non obstante clause. This is understandable because the intention of Parliament was that all the other provisions of the Act governing computation of assessee's total income must first have a free play. It is only in those cases where the total income of the assessee chargeable to tax under the other provisions of the Act is less than 30% of its book profit, an amount equal to 30% of book profit will be deemed to be the total income of the assessee. Here the introduction of the deeming principle is significant. And the significance lies in the fact that it only highlights the limited purpose for which the provisions of section 115J(1) have been enacted. 15. We then have section 115J(2) which again starts with a non obstante clause. Here again the non obstante clause is designed not only to highlight the limited purpose which section 115J(1) is designed to s....